IDC: Second-Quarter Storage Sales Slump As Capacity Booms

Pages

The storage industry appears to be heading toward a slump as year-over-year revenue slipped for the second quarter in a row, according to the latest IDC quarterly report.

Bucking the overall downward trend are storage-focused vendors, including EMC and NetApp, both of which enjoyed strong revenue growth for the second quarter of 2013, IDC reported. However, storage sales by systems vendors, as well as by traditional storage-focused Hitachi, fell year-over-year to drag overall sales down despite a huge jump in capacity sold.

Analyst firm IDC on Friday said second-quarter 2013 worldwide external disk storage systems factory revenues fell year-over-year by 0.8 percent to just over $5.9 billion. Total disk storage systems sales, which includes both external storage and internal storage sold as part of a server, fell 5.0 percent to about $7.7 billion.

However, IDC reported, total storage capacity shipped grew 21.5 percent over last year to reach 8.2 exabytes.

The high growth in storage capacity combined with a drop in revenue was no surprise to one solution provider.

That solution provider, a Dell partner who asked to remain anonymous, said that customers are keeping their data longer and, therefore, moving more of that data to disk as it ages.

"Unless it's a new customer, 80 percent of our orders are capacity-based orders," the solution provider said. "They're buying slower 7,200-rpm high-capacity drives. It's what we've seen with our Dell Compellent sales. If we size the I/O correctly, future upgrades tend to be for the slower-capacity tiers."

The solution provider said it is important to do an application analysis to help design storage solutions with a performance tier and then plenty of large-capacity drives. "But if customers buy storage for a few applications and then add more applications, they will be adding more performance drives," the solution provider said.

No matter how storage sales were measured, EMC kept its traditional top spot with sales in the second quarter of $1.9 billion, up 2.1 percent over the same period as last year. That gave EMC a 31.3 percent share of the external storage market.

EMC's growth did not surprise that solution provider, who often competes against the vendor with Dell solutions.